Spares shortage rocks Air India

Spares shortage rocks Air India

New Delhi: Air India has slipped in its payments to key spare parts vendors, prompting many to stop supplies to the ailing airline.

According to sources, the dues of suppliers such as Airbus, Honeywell, Meggit International, Goodrich, Hamilton, Wesco Electrical remain unpaid, some for more than three quarters, leading to the shortage of parts that has resulted in a large part of the fleet being grounded.

Sources in the airline said the bills ran up to millions of dollars and as the vendors knew of Air India's financial difficulties, they were unwilling to give the state-run carrier more leeway.

"The whole thing boils down to the fact that our inventories of many key parts are empty and suppliers will not give us those parts unless we settle earlier bills ... a cash infusion is a must if the airline is to go about its ordinary business," the officials said.

In reply to an email query to the management, the airline gave a short answer: "It's an internal matter between the supplier and Air India."

The result of the "internal matter" of course is that nearly a quarter of the Maharaja's fleet is today lying grounded, according to pilots.

Earlier in the week, Air India had said in a statement, "It is a common practice for every airline to ground some of its aircraft for routine maintenance and checks periodically by its engineering department so that the aircraft are fit to fly in conformity to laid down standards."

This statement came about after the airline's pilots themselves released a statement complaining that 23 per cent of the fleet was grounded.

The Indian Commercial Pilots Association (ICPA), which represents Air India's narrow-bodied fleet, on Monday alleged as many as 19 aircraft, including nine Airbus A321s, were taken out of flying because of want of spares, resulting in a significant loss of revenue to the carrier, besides flight cancellations.

Of the score or so aircraft which have been grounded, around nine are Airbus 321s, four are Airbus 319s, five Boeing 777s and two Boeing 787s, according to sources. The total value of the aircraft sitting in the hangers is over $3.5 billion.

Civil aviation ministry officials as well as analysts said the only way to nurse the airline back to health was to write off part of its debt and liabilities and inject fresh funds.

In a report prepared to revive the airline, the Swadeshi Jagran Manch (SJM), a right-wing think-tank affiliated to the RSS, has recommended writing off the entire debt. Aviation ministry officials wants to reduce about Rs 10,000-15,000 crore, from the airline's nearly Rs 49,000-crore debt pile. Also on the table are plans to infuse Rs 2,000-3,000 crore in capital in line with the SJM's recommendations.

"We feel if the government can write off debt owed by large private corporations and infuse more than Rs 2 lakh crore into banks which have been toting up losses, it can also do a write-off for Air India... the airline has come to this pass not for its own faults but as it was run down by poor management," said Ashwani Mahajan, national co-convenor of the SJM, a part of what is called the Sangh Parivar.

The Sangh Parivar, a loose confederation of right-wing bodies affiliated to the RSS, has been opposing privatisation ahead of the 2019 general elections and that was one of the reasons why the government decided against more sops in its attempt to privatise Air India.

Private airlines wanted a larger share of loans to be written off and the dropping of clauses such as continued government shareholding and presence on the board, besides maintaining the airline as an independent entity as long as the government retains its shares in Air India. Instead, the divestment bid was quietly taken off the market.

On Friday, the Air India board of directors is believed to have discussed a turnaround plan, but Mahajan and other analysts say the two crucial decisions on loan write-off and capital infusion can only be taken by the Union cabinet.

Air India's woes stem from a huge debt overhang from the purchase of 111 aircraft and giving away of slots and flying rights, made worse by a downturn in the travel market post 2008 on the back of a spike in oil prices. Besides, a badly managed merger of loss-laden Air India with profitable Indian Airlines played a role.